Donald Trump has a chance to rally his core supporters as well as left-wing Democrats, wrapping himself in the populist flag to take on the politically powerful drug industry.
He is vowing to keep a campaign pledge to push legislation allowing Medicare to negotiate prescription drug prices, a practice currently prohibited by law. Proponents say this would reduce drug prices and Medicare costs for the federal government. Medicare pays for about 29 percent of prescription drugs in the U.S. and would have considerable leverage.
Trump would be taking on the leaders of his own party, starting with House Speaker Paul Ryan, R-Wisconsin. Most Republicans have long argued that giving Medicare such power is tantamount to government price-setting, which ideologically they oppose and which they say would stifle innovation and research in the drug industry. Many of them receive huge campaign contributions from the industry’s sizable political war chest.
There are arguments over the merits and effects, but the politics are clear cut. In a Kaiser Foundation poll last autumn, the public, by 82 percent to 17 percent, favored allowing the federal government to negotiate lower drug prices. Huge majorities say costly drug prices — in recent years they have risen about four times the rate of inflation — are a major concern.
These costs are felt by some of Trump’s strongest supporters, non-college educated whites. And liberals, led by politicians like Vermont Sen. Bernie Sanders, champion a robust government role to keep drug prices down.
If Trump is serious, he’ll have to do some heavy arm-twisting on Capitol Hill. Speaker Ryan says the current system is working “extremely well,” and suggests the president consult his designated Health and Human Services secretary, Tom Price. Like Ryan, Price is a small-government conservative skeptical of such interventions.
The clout of the drug industry shouldn’t be underestimated. When the Medicare prescription-drug law was passed in 2003, the industry and its Republican allies, including President George W. Bush, insisted on a provision that explicitly bans Medicare from negotiating prices.
Drug-industry interests made $18 million in political contributions to congressional candidates of both parties in the past election cycle. Even one of Trump’s closest allies, Rep. Chris Collins, R-New York, opposes the idea of the cost negotiations. Collins, who is the president’s go-to man on legislative relations, got $84,750 from the drug industry in the last election. Ryan received $326,949.
There was an instructive vote in the Senate this month on a closely related issue, allowing the importation of cheaper drugs from Canada. It failed 52 to 46. But it garnered the support of 10 Republicans, including deficit hawks like Rand Paul of Kentucky and Utah’s Mike Lee.
However, 13 Democrats, most of them beneficiaries of industry political contributions, voted against the measure. Subsequently, they have gotten a lot of flak from liberal groups, which especially have targeted Cory Booker of New Jersey. He received $49,830 from the industry in the last election.
If Trump goes all out on this issue, it will be near impossible for most of these Democrats to side with the industry over a Republican president whom they accuse of representing the interests of the rich. And, knowledgeable Congress watchers say, a number of Republicans, in the face of White House pressure and public opinion, would cave, too.
Albert R. Hunt is a Bloomberg View columnist. He was the executive editor of Bloomberg News, before which he was a reporter, bureau chief and executive Washington editor at the Wall Street Journal.